HMRC chases offshore assets & income

A number of taxpayers have received letters from HMRC recently outlining that HMRC has information about their offshore income and gains. These letters seem to be different to previous letters which seemed to be ‘fishing expeditions’.

The latest version of the letter confirms that HMRC compared the information received under information exchange agreements with other countries, to the individual’s tax record and tax returns, before sending the letter. This indicates that the letter is not speculative. HMRC is taking a risk-based approach and is only contacting taxpayers where it is unable to reconcile the figures received under information exchange agreements to tax records and tax returns.

All the letters include a “certificate of tax position” form which HMRC asks the individual to complete and return whether they have additional tax liabilities to disclose or not. This is to encourage a response from the individual. HMRC generally gives 30 days from the date of the letter to respond.

If you have received such a letter, you should consider your position very carefully and the subsequent action that should be taken, especially whether the ‘certificate of tax position’ should be signed and returned. Frontier can of course assist with this matter, if you have received such a letter.